Proposed Isolated Empire Railroad Project

Russ Fotheringham, with DCED's Division of Business and Economic Development, said he is the project manager for the Isolated Empire Phosphate and Railroad Project. They have received a $1 million TCSP grant to study and submit applications for the railroad that would be part of this project. They have also submitted an application for additional money for the same purposes. Mr. Fotheringham said they are asking the Commission for their non-financial support of this two part project. The first part of the project is a complex of manufacturing businesses/factories. The second part is a short line railroad that would tie the resource--Uinta Basin--to the main line U.S. Rail System. Two years ago they received a proposal from Universal Chemical and Mineral, out of Chicago, to develop a $300 million complex of businesses using the phosphate deposits in Eastern Utah as a base for their manufacturing. Three keys to this project are the phosphate itself, the new manufacturing processes that would be used, and a railroad. The railroad is needed to bring products into the area, and to transport the manufactured products out. A 100 acre site at the Deseret Generation and Transmission (DG&T) plant would be used as the site for the manufacturing complex. The railroad servicing the project would run from the DG&T east into Colorado, and over to Rifle.

Dan Kuhn, railroad planner for UDOT, continued with the presentation. He said the funding that was obtained and that they have applied for is in no way connected with highway funding. This is money the Federal Government now sets aside specifically for the development of short line railroads in various part of the U.S. This is regarded as a pilot project for the rest of the country to follow because it's the first project that has met all of the criteria set aside for these types of operations. Mr. Kuhn mentioned that the new railroad construction was going to be in Colorado. The only feasible route is to go east, and some of the reasons for going to Rifle include it being the most environmental friendly route, and being the shortest route at about 92 miles. And at $1 to 2 million per mile to build a new railroad, distance is money. However, the most important reason deals with competitiveness. By going to Rifle, they will have access to the two largest railroads in the U.S. And, the DG&T company has offered the use of their railroad line, saving about 32 miles of new railroad construction. Part of the money they will be receiving will be earmarked to study and determine exactly what kind of engineering work would be necessary on the Deseret Western Railroad, which is an isolated electric railroad, to bring it up to standard to handle the 10 million tons a year this railroad is projected to carry--a railroad like this only needs 3 million to be profitable. Another issue is that the railroad needs to be built to mainline standards, which includes the ability to handle double stacked containers. Since they don't run double stacked containers under overhead electric catenary, it will be an interesting study to determine whether they have to go to diesel operation for Deseret Western, or if they can raise the overhead electric catenary sufficiently to clear two nine-foot containers, double stacked. Traffic patterns will also be studied. Mr. Kuhn said there is a great deal of interest in the railroad from engineering and construction firms, etc. There is also interest in this project because it is not a one commodity railroad. It's really the first railroad of this magnitude to be built for multiple list of commodities. Mr. Kuhn noted this is not the only railroad project in the state. There is another railroad being planned right now to run between Levan and Salina, which promises to take about 700 truck loads of coal off the highways.

Cary Wold from Uintah County spoke and said he is also representing Duchesne County and the Ute Indian Tribe. His focus is on the local economics. Uinta Basin as a whole, in its isolation, is constantly one of the highest unemployed regions in the state. They are 2.5 to 3 times the state's average of unemployment, and are limited to the oil and gas industry. They are. They would like to have an opportunity to become diversified and sustainable. Mr. Fotheringham added this is about a $.5 billion project with the rail and manufacturing parts together, and will have an impact that will be a hundred times greater than Micron would have on the Wasatch Front when it's finished. Continued discussion focused on ownership of the deposits that will be mined, and the affects this project will have on the two gypsum plants in operation in the Sigurd area. Director Warne suggested inviting these gentlemen back for an update when the study is finished.

Consultant sought on rail project -- October 4, 2000 -- It is a project that could be an old solution to a new problem -- bringing economic development to the isolated Uinta Basin.

The Isolated Empire railroad project will lay little, if any, new track inside Utah. The majority of the track will be in Colorado which is okay with most people in Colorado.

The state of Utah has been working for over two years on an economic development proposal that includes a 3,400-acre phosphate mine, phosphate processing facility, wall-board plant, fertilizer plant, administration offices and a 135-mile short-line railroad from Bonanza to Rifle, Colorado.

"A railroad is still the most economical way to transport bulk materials," said Dan Kuhn, Rail Planner for the Utah Department of Transportation at last week's Legislative Conference 2000, hosted by the Uinta Basin Association of Government.

Kuhn said besides the economic benefits of the rail line, Colorado favors it because it would force the reopening of a Colorado rail line that has been closed for a number of years.

The extra tonnage would prompt Union Pacific to re-open Tennessee Pass to Pueblo, a line the UP closed after taking control of the rail line and leaving the area at a disadvantage economically, Kuhn said.

The railroad would connect to the exiting rail that delivers coal twice daily to the Deseret Generation Bonanza Power plant in southeastern Uintah County. The line goes about 34 miles from Bonanza to the Deserado Coal Mine north of Rangley, Colorado.

This week the Utah Department of Community and Economic Development through the Utah Department of Transportation is advertising the need for a qualified consultant to provide a conceptual alignment study and project cost estimate for the proposed railroad extension from an existing mainline railroad site in western Colorado to a connection with the existing Deseret Western Railway north of Rangley, Colorado.

Preliminary costs to construct the railroad is estimated at $300 million which would require 3 million tons of freight traffic a year.

The State of Utah has received a $1 million Federal Transportation and Community Systems Preservation grant to begin studying the project. Of the million, they can spend $871,000 on studies.

Residents of the Dry Fork area find no objections to the railroad portion of the project, but they are outspoken about the phosphate operation.

Illinois based Universal Chemical and Mineral Corporation is the lead company interested in developing the phosphate deposit which is on 3,400 acres of Utah State trust lands. The property for the open pit mine straddles Ashley Gorge, one of the area's sources for culinary water.

UC&M plans to use a weak hydrochloric acid to leech only the phosphate and carbonates from the ore at the mine site. The tailings, which include iridium 226, uranium and sand are returned as damp sand back to the mine. The area is then re-filled and reclaimed. The treated phosphate would be piped to a facility north of the Bonanza Power plant. Approximate 12 to 14 acres would be mined each year with end products of animal feed mono- and di-calcium phosphates, high purity phosphoric acid and food grade gypsum. Gypsum is used in tofu, bread, beer making and pharmaceutical products, but what is being proposed is a fire-proof, water-proof fiber all-board project known as "Enviroboard".

In 1988 a similar phosphate project was proposed by John Archer, who still holds the lease on the property. Because the project affects federal lands it was subjected to an environmental assessment and NEPA process. Because the present facility is entirely on state lands, the operators hope to bypass the federal impact studies.

Terry Smith, Uintah County resident, suggested that the project should be subject to an environment impact statement, because it wraps up all the impacts in one document and allows for public comment. Smith said he was speaking for a group of about 100 people who have concerns about the proposed mine because of its impacts to Dry Fork and Taylor Mountain residents.

"Tonnage is what drives the railroad, and without the phosphate mine, the tonnage won't be there," Smith said.

Kuhn said that the rail project is not tied to the phosphate mine operation and could stand on its own.